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Energy & nature investor quarterly
10/29/2025
Quarterly highlight: The elusive “Peak Oil” scenario
Michael Lewis
Head of Research, ESG
Steffen Kutscher
Head of Stewardship – Standards & Processes
IN THE NUTSHELL
- Summary: The past year has seen the coverage of national climate commitments fall, the operations of net zero financial alliances disbanded or reviewed and many corporate climate commitments still lacking credibility.
- The Big Picture: The market is abandoning the idea that global oil demand will peak this decade. This partly reflects the inability of renewables to meet the growth in global energy demand.
- Policy: U.S. policy is focused on energy expansion, which will help meet higher power needs from AI data centers. In Europe, a more flexible approach to climate ambition is emerging, including extending the compliance period for automakers to meet CO₂ emission targets.
- Technology & innovation: China has be come a leader in clean energy technology, accounting for around 75% of global patent applications, up from 5% in 2000. This underpins China’s recent pledge to cut greenhouse gas emissions by 7-10% from their peak by 2035.
- Risks & opportunities: European automakers face declining market share and overcapacity, and recent investments have also been less productive than those in Japan and the U.S. These raise concerns about future profitability and dividend yields, which are already under pressure.
- Investment implications: In a scenario where global crude oil demand remains strong over the next decade, this would tend to reduce stranded asset risk, strengthen the case for higher carbon prices and, over time, increase insurance gap risk in the event of extreme weather impacts.
Introducing the energy & nature investor quarterly
The global shift toward a high-tech low carbon and more sustainable global economy is reshaping industries, markets, and society at large, bringing both risks and opportunities for investors. At DWS, we are seeing a growing number of clients seeking strategies to manage these evolving risks and capture the potential transition-related investment opportunities. To help navigate this transformation, we are launching the Energy & Nature Investor Quarterly, a publication designed to cut through the noise and deliver material, actionable insights for institutional investors. Each issue will examine what we view as the most impactful policy developments, regulatory changes, technological advancements, and market innovations driving risks and opportunities. We hope you find value in this new publication and welcome the opportunity to discuss the insights and implications it raises.
1 / Performance dashboard
The dashboard summarizes key financial indicators relevant to the energy transition. It presents quarterly and annual performance data for commodity indices and climate transition commodities, including carbon prices. It therefore provides an overview as to how transition-linked assets are performing relative to broader commodity trends.
1.1 Clean energy and climate indices perform strongly this year
The S&P clean energy index has posted just shy of 50% returns so far this year. Climate index benchmarks have also performed strongly although have lagged their broad-market parent indices as methodology tilts and exclusions have affected performance. Meanwhile there has been a divergence between regional carbon markets with European carbon prices posting gains against a 40% decline in the Chinese carbon price so far this year.[1] Price weakness has also been a feature across the fossil fuel sector.
Of the key climate transition commodities, cobalt has been the star performer with prices up over 70% so far this year. These gains were largely achieved in the first quarter of the year when the Democratic Republic of Congo (DRC), which accounts for around 70% of global production,[2] suspended exports to curb oversupply. In contrast, lithium prices were dogged earlier in the year by new capacity in China and high inventory levels. However, price losses were partly reversed over the summer months following production disruptions in certain mine locations in China.